Yesterday, the Tax and Trade Bureau (TTB) issued guidance for ethanol-based hand sanitizer and waived certain permitting and tax provisions. Specifically, any existing Distilled Spirits Permittee (DSP) can manufacture hand sanitizer or distilled spirits (ethanol) for use in hand sanitizer, as described in TTB notice, without having to obtain authorization first.
Additionally, hand sanitizer products are not subject to federal excise tax if made with denatured ethanol – i.e., ethyl alcohol unfit for human consumption. Undenatured ethanol – i.e., neutral grain spirits, pure grain alcohol, drinking alcohol, etc. are still subject to federal excise tax.
Denatured ethanol is typically derived from the first-run – the “heads” – of the distilling process. distillers’ cuts of the heads, hearts, and tails. The art of distilling is with the heart – this is where the magic is made. The heads and tails are typically unusable. Until now…
This is currently in effect through June 30, 2020, and may be extended as necessary.
For more information, see the TTB communication. If you have any questions, please contact our Brewing & Distilling Practice Group.